§ 1969–70 will see the implementation of a new tax rule under which the unearned income of children who are not married, or in regular full-time work will be aggregated with the income of their parents for tax purposes. In last year's debates on the Finance Bill some points arising on this were left over for consideration, and I am bringing forward proposals this year to meet a number of them.
§ The Government's acceptance of the basic proposals of the Latey Committee for reducing the age of majority under general law to 18 means that corresponding changes should be made in the new tax rule introduced in last year's Finance Act. I therefore propose that the age limit for aggregation of the unearned income of children with their parents' income should be reduced from 21 to 18. this automatic reduction to 18 will not apply to covenants, settlements or gifts by parents for the benefit of their children, the income from which will, unless the child has begun its full-time working career, continue to be treated as the parents' income till the child is 21. These changes will come into effect as from 6th April this year.
§ I also propose two exclusions from the new rule for "parent/child" aggregation. 1011 Income from lump sum awards by the Criminal Injuries Compensation Board for personal injury will, like income from actual awards of damages, be excluded from aggregation; and I also propose to exclude affiliation payments received by an unmarried mother in respect of her child.